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A Driving Force

It started with a single helicopter, a vision and little else beyond sheer determination.


March 26, 2012
By Paul Dixon

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It started with a single helicopter, a vision and little else beyond sheer determination. Twenty-five years on and two million passengers later, that vision of scheduled rotary-wing service between Vancouver and Victoria, downtown to downtown, is very much a reality. Danny Sitnam, Helijet International’s president/CEO, was a young apprentice machinist when “it” happened – a friend took him for his first ride in a helicopter and his world changed forever.

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It took the team roughly three or four years to rationalize what it would take to make the business work. (Photo courtesy of Helijet)


 

The ink was still drying on his commercial licence and the 19-year-old Sitnam was headed north, ferrying helicopters to the Yukon, “cutting his teeth” as he describes it. In the early 1980s, he returned to southwestern British Columbia and started a small helicopter training school with a partner. The school is still in operation, but Sitnam felt there were bigger untapped opportunities for helicopter operations in the Vancouver area. Brainstorming with a group of friends, he became convinced that there was a market for a scheduled passenger helicopter service between downtown Vancouver and the provincial capital, Victoria on Vancouver Island. His vision: a passenger airline utilizing helicopters, not to be confused with a helicopter company that carries passengers.

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One of the would-be Helijet partners suggested the idea of commuter service was “the stupidest thing he’d ever heard of” and walked out. The majority of staff stayed. (Photo courtesy of Helijet)


 

The original capital of British Columbia was the city of New Westminster, which today is a suburb of Vancouver, but when the then-separate colonies of B.C. and Vancouver Island were amalgamated in 1866, Victoria won out as the then-and-now capital. Victoria, as a city, thrives on the business of government and while the seat of government and ministry offices are located there, most of the people who come to do business with the government – and for the government – have to cross the Salish Sea from the mainland. Twenty-five years ago, the choices were limited to crossing by car and ferry, a time-consuming process especially for a day trip, flying into Victoria International (YJJ), followed by a 22-kilometre taxi ride downtown, or utilizing the established floatplane service between Vancouver and Victoria harbour.

To say that reaction to Sitnam’s big idea was mixed would be an understatement. One of the would-be partners suggested it was “the stupidest thing he’d ever heard of” and walked out. But for those who stayed, they still share the same vision. Sitnam puts the early days into perspective. “I think it’s a combination, that at the start, we needed people with entrepreneurial skills; it’s pretty gutsy starting up an airline using helicopters. We needed people who could think outside of the box, but had also gone through their own business experience, of failure, to be able to stare the devils in the face. It certainly helped me when we launched. It isn’t for the weak of heart to go into this type of business. A lot of the senior people with this company have been here for over 20 years.”

Humble Beginnings
On Nov. 26, 1986, Helijet started service with a single Bell 412, offering seven daily flights from Vancouver to Victoria. Sitnam and the Helijet management team were running a scheduled airline business. He recalls it was a long time before he slept through the night. “The business plan as we know it wasn’t a structured thing, it was a few pages. We thought we could move 20,000 passengers at $70-80 and we would only have costs that are half the revenues. That was the business plan. The revenue forecasting wasn’t too bad, but on the expense side, we were so far off the mark, truly off that side of the page without understanding what it costs to deliver that service. It took us a couple of years to really understand it. This business costs a lot. This is reality, these are not one-time charges, they are there all the time.”

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In the winter, Helijet’s IFR advantage over the floatplane competition is readily apparent with morning departures a
full hour before the float operators.  (Photo courtesy of Helijet)


 

It took the team roughly three or four years to rationalize what it would take to make the business work – and there was no faith from the banking community and rightfully so with the red ink that was coming out. “It wasn’t bankable, it was impossible,” he says. “We really funded ourselves instead of aligning with bankers. The major founders became the bank, the shareholders, showing their commitment to the plan. It took us about three-and-a-half to four years before we saw some black ink in the program.”

Even as the financial picture improved, uncertainty was a constant companion. Rick Hill, VP operations and commercial programs,
says making things work in this industry is rife with uncertainty – and it’s not for the faint of heart. “This is the airline business. The airline portion of our business has always been the most challenging and continues to be the most challenging as far as margins,” Hill says. “It’s got so many different dynamics attached to it so it’s difficult to forecast the market, the consumer and what they’re going to decide tomorrow, next week and next month.”

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From a single Bell 412, Helijet has grown to a fleet of 10 Sikorsky S-76s (A and C++), three Bell 206s and two Lear 31As. (Photo courtesy of Helijet)


 

Hill notes that the bottom line is “time is cost.” And one of the main reasons Helijet came into being was to bring IFR into the Victoria-Vancouver corridor. “It’s a huge piece of what Helijet does and it’s a key reason why we’ve been successful,” says Hill. “There was a floatplane monopoly before and they can’t do the things we can do. We brought a whole new dynamic to the business, in the dead of winter.”

In the winter, Helijet’s IFR advantage over the floatplane competition is readily apparent with morning departures a full hour before the float operators and evening departures almost three hours after the last floatplane flight of the day. Coupled with 99.2 per cent of 2011 flights departing per the published schedule, it’s attractive for bureaucrats and those doing business with the government to schedule meetings in either city with a high degree of certainty – an opinion voiced by Glen Miller, who has worked both in government and as a consultant.

“I prefer to use Helijet over fixed-wing operators in particular because they are not as subject to the vagaries of weather,” says Miller. “Relying on a fixed-wing operator that may not be able to fly due to fog or other inclement weather may mean missing important business meetings that must then be rescheduled.”

Growth Prospects
From the single Bell 412, Helijet has grown to a fleet of 10 Sikorsky S-76s (A and C++), three Bell 206s and two Lear 31As. The fleet expansion was paramount, says Sitnam, because while the 412 had its strengths, it wasn’t the right aircraft for this particular demographic. “I have to give Sikorsky credit; their good salesmen kept pounding on the door saying, ‘you’re in the wrong aircraft, you should look at ours.’ We started running the numbers, and realized that some of the things we were looking for, like creature comfort and cabin configuration, really were conducive to business travellers.”

“Nobody really likes sitting sideways in the 212-412 configuration,” adds Sitnam. “The seating wasn’t that great – four people facing aft, five people facing forwards, and it wasn’t conducive for business travellers. Sikorsky said we could get three rows of four all facing forward. Speed was also a big factor with the S-76, plus the cost factor it was taking to run a leg. Then we also moved into wheels. The S-76s were a much better, airport-friendly aircraft around our fixed-wing brothers.”

As the fleet grew, so did the workforce and today, it numbers some 135, including 40 rotary-wing pilots, 10 Lear pilots and 35 AMEs. Helicopters’ columnist Neil MacDonald spent 17 years with Helijet, working his way up from the ramp to fly scheduled service and air ambulance. “I had the privilege and the pleasure to work for Helijet on and off for more than 17 years, and have nothing but fond memories of the people and organization,” says MacDonald. “The leadership set the perfect tone for a professionally run, top-class airline, with a family atmosphere. I feel very proud to have been a part of that family.”

Another cornerstone to the company is operating the heliports in both Vancouver and Victoria through its subsidiary, Vancouver Heliport Services. It just made sense, says Sitnam, when they were able to take on this responsibility in the mid-’90s, as Helijet was the dominant user of both facilities. Even with a recently inked long-term lease with Port Metro Vancouver, the threat of development is always there. The Vancouver heliport sits on the last piece of undeveloped property on the waterfront, a stone’s throw from Canada Place and the downtown business core. Finding a suitable replacement site would be extremely difficult. Sitnam is quick to point out that “there isn’t any federal, provincial or municipal support or subsidization of any sort. It’s kind of like asking Air Canada or WestJet to take all the costs of YVR.”

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Another market that opened up to Helijet has been operating air ambulances for the BC Ambulance Service. (Photo courtesy of Helijet)


 

A Global Model?
Always seeking new opportunities, Sitnam and his partners thought hard about applying the Helijet model globally once they’d refined operations in B.C. It didn’t take long, however, for the team to realize that the notion was one without sound traction. “We had a vision that we would grow our scheduled service into a broader area or areas, but as we experienced the business and rationalized it we realized that the growth is going to be very, very limited to anything outside of this geography,” he says. “We thought we could grow the program in the New York area where everybody has tried. We did a lot of work in that area and there were a lot of really smart people that wanted us to set up shop there.”

Sitnam notes that even Sikorsky, in the earlier days of their relationship, would take them along to other areas where they were trying to sell aircraft, trying to bring a commercial sense of an operator like Helijet to establish something in Taipei. “We went to Taipei and looked at an opportunity there to establish using the helicopter,” says Sitnam. “Then we went over to Japan and studied that, Osaka, Narita. Other operators started it. We analyzed it and we were pretty cautious to do it ourselves, and they started and they failed.”

Instead of trying to reinvent the wheel, Helijet has stayed close to home, focusing on broadening horizons on a smaller scale. The leisure market is one such area. As Hill notes, the company services a number of exclusive fishing lodges on Haida Gwaii, off the north coast of B.C. “A lot of equipment from here goes to Haida Gwaii; last summer we had four S-76s up there,” he says. “It’s a big operation. It fits very nicely with our scheduled service, because our schedule service tends to go down in the summer. Our Victoria service is much busier in the winter. It’s nice to be able to move those resources out of here and into something else. That’s been a good thing for us.”

Another market that opened up to Helijet has been operating air ambulances for the BC Ambulance Service. Starting in 1998, Helijet provided rotary-wing service from YVR and today operates two S-76C++ and the Lear 31A from YVR and a third S-76C++ at Prince Rupert. “Before Helijet became involved, it was largely just patient transfer and while that’s still part of it, there’s a lot more first-response,” he says. “It’s been great to grow that and change the dynamic and the change in technology we’re putting in these aircraft – for example, the Max-Viz were putting in these aircraft to fly at night. We’re constantly upgrading the technology and safety as you need all the tools at your disposal.” In fact, air ambulance service has grown to such an extent, that Sitnam expects it will account for as much as 55-60 per cent of 2012 revenue.

An Open Mind
Keeping focused on doing what they do best – and ensuring they don’t become complacent – is the most important challenge Helijet faces going forward, says Sitnam. It’s a goal that’s not easy to attain. “The biggest challenge for us now, looking at it is being open-minded and trying not to get stuck in our ways,” he says. “We all get older and we need to be open and learn to take criticism.

“Fortunately, the quorum has been together for a good time, and it’s allowed the company to move on and diversify, move on to other areas, let go of the weaker links. We’ve had a lot of closures of business opportunities over 25 years, some of them disheartening and disappointing. I think that just makes us stronger. It shows we’re willing to take a chance; you calculate everything out the best you can, give it a go and know when to say ‘enough is enough.’ If you don’t try it, you’re never going to have an opportunity to make it a success.”


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